Fresnillo PLC has reported its production for the three months ended June 30, 2009. Quarterly attributable silver production increased by 6.7% and 4.0% respectively when compared to the second quarter 2008 and to the first quarter 2009, which is a record for the quarter. The higher quarterly production was a result of an increase in ore milled at the Fresnillo due to a more efficient maintenance programme, and higher ore grades at Ciénega and Herradura. In May, additional ore extracted from the development works at Saucito were processed at the Fresnillo mill, which contributed approximately 67,000 silver ounces.
In the 3 months ended Mar31/09, gold production at Ciénega for the first three months of 2009 decreased when compared to the same period last year as a result of the decline in the ore grades. The company is confident that gold ore grade will stabilise around the current levels, as the benefit of the preparation of new stopes, the increased milling capacity and higher recoveries begins to take effect. Fresnillo has begun to evaluate a new technology to mine high grade narrow veins.
Gold production at Ciénega decreased against the comparative periods mainly due to lower ore grade and dilution. Annual silver production was also affected by a decrease in ore grade compared to last year and to the December 2007 quarter. Fresnillo expects the end of year ore grades of 4.7 g/t gold to remain steady over 2009. In order to stabilise the declining grade the company is preparing new stopes and controlling the dilution. In addition, the Company is taking actions to mitigate the adverse affect in the declining ore grade, such as increasing the ore milled and increasing the recovery rate. Full year lead and zinc production increased by 14.5% and 17.4% respectively compared to 2007 as a result of higher recoveries and ore grades.
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